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New Code of Good Practice on Protest Action published by NEDLAC Employment equity changes imminent: Department confirms consultation on sector targets
New Code of Good Practice on Protest Action published by NEDLAC
On 2 September 2022, the National Economic Development and Labour Council (NEDLAC) issued a new Code of Good Practice: Protest Action to Promote or Defend Socio-Economic Interests of Workers (Code) in terms of the Labour Relations Act, 1995 (LRA).
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The publishing of the Code follows a national shutdown which took place in South Africa a few weeks ago to address issues such as the rising cost of living and loadshedding. While the national shutdown of 24 August 2022 proved not to be as ‘massive’ as the organising trade union federations, the Congress of South African Trade Unions (COSATU) and South African Federation of Trade Unions (SAFTU) may have hoped, employers at the time were gearing themselves up for potential unrest and may have been wondering what their rights and obligations were in respect of employees who chose to take part in the protest.
Protest action is synonymous with the history of South Africa and remains common today. In terms of section 77 of the LRA, every employee who is not engaged in an essential service or a maintenance service has the right to take part in protest action if:
- the protest action has been called by a registered trade union or federation of trade unions; - the registered trade union or federation of trade unions has served a notice on NEDLAC stating (i) the reasons for the protest action; and (ii) the nature of the protest action (s77(1)(b) notice); - the matter giving rise to the intended protest action has been considered by NEDLAC or any other appropriate forum in which the parties concerned are able to participate in order to resolve the matter; and - at least 14 days before the commencement of the protest action, the registered trade union or federation of trade unions has served a notice on NEDLAC of its intention to proceed with the protest action. Where the above requirements are met, employees must be permitted to take part in protest action or in any conduct in contemplation or in furtherance of protest action and, while the ‘no work no pay’ principle may be applied by employers, employees are, among other things, protected against dismissal for participating in the protest.
The Code now provides additional guidance on the application of section 77 and must be read alongside the Labour Relations Regulations. Among other things, the Code deals with the following:
The procedural requirements that must be met in order for the protest action to meet the requirements of section 77, including what form the notices to NEDLAC must take, how the notices may be delivered, the sequence of events in a section 77 referral and the time frames in which the process must take place.
The substantive requirements that must be met in order for the protest action to be ‘protected’ in terms of section 77. In particular, the matter giving
rise to the intended protest action must concern a matter that promotes or defends the socio-economic interests of workers; and there must be a consideration of the issues with a view to reaching consensus. In this regard, matters of socio-economic interest exclude (i) matters of mutual interest between employer and employee and (ii) matters of a purely political nature. Matters of socioeconomic interest include (i) issues that are major social and economic policy trends which have a direct impact on the trade union’s members and on workers in general, in particular as regards employment, social protection and standards of living; and (ii) matters which fall within the ambit of the social status and economic position of workers in general such as the imbalances in the education system as a result of past government policy.
The establishment, composition, functions, quorum, obligations and decisions of the NEDLAC standing committee as well as the appointment of a panel of facilitators to facilitate the consideration of matters giving rise to a s77(1)(b) notice.
The pre-consideration processes (i.e. how the s77(1)(b) notice is dealt with when it is served on NEDLAC). The facilitation of considerations, including what issues must be addressed during the first meeting, the procedures to be followed and the obligations of the parties during the facilitation process. In this regard, among other things, the representatives of the parties are required to sign a ‘good faith declaration’ in which they declare that they will, inter alia, participate in engagements in good faith and with the sincere intention of resolving the matter.
Dispute resolution mechanisms
In this regard, the Labour Court has jurisdiction to: (i) review and set aside NEDLAC’s decision that the matter is not a matter of socio-economic interest to workers; (ii) interdict protest action if there has been noncompliance with the provisions of section 77(1)(b), (c) or (d) of the LRA; and (iii) limit the protected nature or duration of the protest action by weighing the importance to the workers of the matter giving rise to the action against the nature and duration of the protest action.
The Code aims to strengthen and promote the consideration of matters concerning the socio-economic interests of workers and provide mechanisms to promote a dialogue on these matters. It also serves to provide guidelines to NEDLAC, facilitators and other appropriate forums to which these matters are referred for the proper and effective consideration of these matters. The Code should, accordingly, provide useful structure to the discussions on socio-economic interests between relevant stakeholders going forward.
From an employer’s perspective, the Code should also make it easier to determine whether the requirements of section 77 of the LRA have been met when assessing workers’ participation in protest action.
This newsflash was prepared by Chloë Loubser. Please contact a partner in our Employment and Benefits Practice should you require further information.
Bowmans is a leading African law firm with offices in Kenya, Mauritius, South Africa, Tanzania, Uganda and Zambia and Alliance firms in Ethiopia and Nigeria.
Employment Equity changes imminent:
Department confirms consultation on sector targets
In a media release on 31 August 2022, the Department of Employment and Labour (“Department”) confirmed that the signing into law of the Employment Equity Amendment Bill, 2020 (“the Bill”) is imminent. The President is expected to assent to the Bill between now and the end of the year. The amendments are due to come into effect on 1 September 2023.
The Bill will introduce various amendments to the affirmative action provisions of the Employment Equity Act, 1998 (“the Act”), these new provisions aim to achieve more rapid transformation in the workplaces of designated employers. The is against the background of the slow progress of transformation since the introduction of the Act in 1998. The most significant of the amendments in the Bill relate to the Minister of Employment and Labour’s power to set sector-specific employment equity targets to which designated employers will held to account.
Setting of sectoral targets by the Minister
The Bill empowers the Minister of Labour to identify national economic sectors for the purposes of the administration of the Act and to determine numerical targets for such sectors. These sectoral targets may differentiate between occupational levels, subsectors, regions or any other relevant factor. Before determining the targets, the Minister will be required to consult relevant stakeholders and the Employment Equity Commission on the proposed sectors and sectoral targets and publish any proposals for public comment.
In its media release, the Department stated that engagements on the setting of sector-specific equity targets started in June 2019 and will be completed by the end of September 2022.
Some of the sectors consulted include:
- education; - water supply, sewerage management & remediation; - accommodation and food services; - human health & social work; - agriculture, forestry & fishing; - wholesale and retail trade; - repair of motor vehicles and motorcycles; - administrative and support; - professional, scientific & technical; - electricity, gas steam & air conditioning supply; and - financial & insurance activities.
The remaining sectors that are to be consulted between now and end of September 2022 include:
- mining and quarrying; - public administration and defence, - manufacturing, information & communication, - construction: and - real estate.
This means that it is likely that, fairly quickly after the Bill becomes law, the sector-specific targets will be circulated for public comment and thereafter, amended if deemed necessary, and implemented. Employers concerned about the targets should keep an eye out for the circulation of the proposed targets and make any submissions they deem necessary prior to the finalisation thereof.
Issuance of compliance certificates
In order to “incentivise” employers to meet targets, the Bill states that certificates will be issued by the Minister if: - the employer has complied with any applicable sectoral targets or has raised a reasonable ground for non-compliance; - the employer has submitted its most recent employment equity report; and - within the previous 12 months, the employer has not been found to have breached the prohibition on unfair discrimination, or paid wages below the level of the minimum wage.
The importance of obtaining this certificate is that state contracts may only be offered and issued to employers who have been certified as being compliant with their obligations under the Act. Furthermore, a failure to comply with these requirements is a sufficient ground for cancellation of any state contract (should no reasonable ground exist to justify such non-compliance).
In the recent media statement, the Department stated that a new online assessment system will be created to monitor the implementation of sector targets. The first year in which the sectorspecific targets will apply is 2024. At the end of that reporting year, the system will be able to tell whether employers have achieved their target, and where employers are not meeting their target, they will need to have justifiable reasons for not achieving their set targets. The system will accept, in good faith, all the information supplied but the Departmental inspectorate, may visit workplaces to verify if information submitted is genuine. In its statement, the Department seems to suggest that the system will automatically generate a compliance certificate for those who comply with the above. However, it goes further to expressly state that if the information supplied is not genuine, then the certificate will be withdrawn.
Definition of designed employer
In addition to the above, the Bills seeks to amend the definition of a “designated employer” by deleting the paragraph which classifies employers with fewer than 50 employees, and who meet the required turnover threshold, as “designated employers.” Consequently, employers who employ fewer than 50 employees, regardless of their turnover, will no longer fall within the definition of a “designated employer” and will therefore not be required to comply with Chapter III of the Act (which deals with affirmative action).
These employers will no longer be required to take certain measures, such as preparing and implementing an employment equity plan, consulting with employees and/or representative trade unions on matters and submitting an employment equity report on an annual basis. According to the memorandum on the objects of the Bill, this is intended to reduce the regulatory burden on small employers. With the possibility that the President could assent to this Bill as early as September 2022, employers should analyse their existing transformation measures and implement the necessary preparations. Compliance with the amendments, as soon as they are enforced, will be vital for businesses, since fines of between ZAR1 500 000 and ZAR2 700 000 may be imposed for a contravention of the Act.
Contravention of the Act fines is between ZAR1 500 000 and ZAR2 700 000
Lauren Salt: Executive lsalt@ENSafrica.com Amy Pawson: Candidate Legal Practitioner apawson@ENSafrica.com
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